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Download Chapter 2 28 Key Highlights 2019 29 Overview 29 C&M Industry Market Performance 33 C&M Industry Financial Performance 34 Telecommunications Sector 40 Broadcasting Sector 41 Postal and Courier Sector 42 ACE Market Overview and Performance This chapter reports on the economic performance of the C&M industry, mainly on the market capitalisation including Bursa Malaysia market capitalisation by sector; telecommunications, broadcasting, postal and courier. This chapter also analyses the financial performance including industry revenue by sector, capital expenditure and ARPU. In addition, it also provides an overview and performance of the ACE Market. KEY HIGHLIGHTS 2019 28 INDUSTRY PERFORMANCE REPORT 2019 OVERVIEW DOMESTIC GROWTH The C&M industry market capitalisation remained resilient despite the external headwinds and global SOFTENED IN 2019, WITH economic uncertainties and continued to play a vital role in contributing to the domestic economy. MIXED PERFORMANCES Sector-wide cost rationalisation continues to ACROSS COMMUNICATIONS be at the forefront of the C&M industry players’ initiatives against the persistent and increasing stiff AND MULTIMEDIA (C&M) competitiveness in the market. INDUSTRY C&M INDUSTRY MARKET PERFORMANCE The C&M industry represents 8.4% or RM144.01 billion of Bursa Malaysia total market capitalisation of RM1,711.84 billion as at end 2019 (2018: 8.1% C&M Industry or RM137.73 billion). The C&M industry market capitalisation has increased by 4.6%, spurred Market Capitalisation by telecommunications sector. This is due to RM144.01 telecommunication companies’ share prices gaining billion 4.6% momentum, driven by corporate announcements (2018: RM137.73 billion) such as 5G initiatives, new product launch, collaborations and financial results. C&M INDUSTRY MARKET CAPITALISATION BY SECTOR 2017 – 2019 Source: Bloomberg, MCMC Figure 2.1 C&M Industry Market Capitalisation by Sector 2017 – 2019 29 C&M COMPANIES’ CONTRIBUTION TO BURSA MALAYSIA 2019 Source: Bloomberg, MCMC Figure 2.2 C&M Companies Contribution to Bursa Malaysia 2019 C&M COMPANIES MARKET CAPITALISATION 2017 – 2019 Company Market Capitalisation (RM billion) Change (%) 2019 2018 2017 2019-2018 2018-2017 Maxis 41.61 41.82 46.94 -0.5% -10.9% Axiata 37.94 35.65 49.67 6.4% -28.2% Digi 34.68 34.99 39.65 -0.9% -11.8% TM 14.38 10.00 23.67 43.8% -57.8% TIME 5.40 4.73 5.29 14.2% -10.6% Telecommunications 134.01 127.19 165.22 5.4% -23.0% ASTRO 6.62 6.78 13.82 -2.4% -50.9% Media Prima 0.31 0.38 0.84 -18.4% -54.8% Star Media 0.36 0.51 1.22 -29.4% -58.2% Broadcasting 7.29 7.67 15.88 -5.0% -51.7% Pos Malaysia 1.16 1.35 4.11 -14.1% -67.2% GDEX 1.52 1.48 3.37 2.7% -56.1% Nationwide Express 0.03 0.04 0.07 -25.0% -42.9% Postal and Courier 2.71 2.87 7.55 -5.6% -62.0% TOTAL C&M 144.01 137.73 188.65 4.6% -27.0% Note: Axiata Group Bhd (Axiata), Maxis Bhd (Maxis), Digi.Com Bhd (Digi), Telekom Malaysia Bhd (TM), TIME dotCom Bhd (TIME), Astro Malaysia Holdings Bhd (ASTRO), Media Prima Bhd (Media Prima), Star Media Group Bhd (Star Media), Pos Malaysia Bhd (Pos Malaysia), GD Express Carrier Bhd (GDEX) and Nationwide Express Holdings Bhd (Nationwide Express) Source: Bloomberg, MCMC Figure 2.3 C&M Companies Market Capitalisation 2017 – 2019 30 INDUSTRY PERFORMANCE REPORT 2019 The market capitalisation for the telecommunications sector has improved by 5.4% to RM134.01 billion in 2019 (2018: RM127.19 billion): The top performer was TM, Axiata market capitalisation registering the sharpest grew 6.4% to RM37.94 billion growth compared to TIME market capitalisation in 2019 (2018: RM35.65 its peers, with market gained 14.2% to RM5.4 billion), spurred by investors capitalisation improving by billion in 2019 (2018: RM4.73 sentiment due to the 43.8% to RM14.38 billion in billion), due to its sustained group’s efforts to maintain 2019 (2018: RM10 billion). growth momentum, profitability. Additionally, TM performance was driven subsequently achieving a their regional exposures by improved profitability robust financial profile with a focus on emerging as a result of ongoing cost countries contributes to optimisation initiatives long-term growth potential In contrast, the broadcasting sector posted a decline in market capitalisation by 5% to RM7.29 billion in 2019 (2018: RM7.67 billion). The decline is mainly due to the competitive market in the digital era. The rise in digital and streaming media resulted in the rapid shift of consumer preference for OTT platform. Similarly, postal and courier sector market capitalisation also posted a decline of 5.6% to RM2.71 billion in 2019 (2018: RM2.87 billion). Service providers are facing challenges in a very competitive market despite the rapidly growing e-commerce parcel market. They are embracing digital solutions to their business and operations in order to sustain and remain competitive. 31 MAXIS AND AXIATA REMAIN ON TOP 10 MARKET CAPITALISATION As shown in Figure 2.4, while the financial and utilities sectors continue to lead the market capitalisation ranking, the telecommunications sector is led by Maxis and Axiata. In 2019, Maxis maintained its position at 7th place as in 2018, while Axiata has moved two notch up to 8th place. TOP 10 MARKET CAPITALISATION 2018 – 2019 2019 Ranking 2018 MAYBANK MAYBANK RM 1 RM RM97.13 billion RM104.83 billion PUBLIC BANK PUBLIC BANK 2 RM RM75.47 billion RM RM96.12 billion TNB TNB 3 RM75.41 billion RM77.34 billion PETRONAS CHEMICALS PETRONAS CHEMICALS 4 RM58.80 billion RM74.32 billion CIMB CIMB 5 RM RM51.10 billion RM RM54.61 billion IHH HEALTHCARE IHH HEALTHCARE 6 RM47.99 billion RM47.27 billion MAXIS MAXIS 7 RM41.61 billion RM41.82 billion AXIATA HONG LEONG BANK 8 RM37.94 billion RM RM41.73 billion SIME DARBY PLANTATION PETRONAS GAS 9 RM37.52 billion RM37.99 billion HONG LEONG BANK AXIATA 10 RM RM37.50 billion RM35.65 billion *As at 31 December Note: 1. Top 10 largest stocks were from the largest 30 companies on FTSE Bursa Malaysia KLCI Index by market capitalisation 2. Malayan Banking Bhd (Maybank), Public Bank Bhd (Public Bank), Tenaga Nasional Bhd (TNB), Petronas Chemicals Group Bhd (Petronas Chemicals), CIMB Group Holdings Bhd (CIMB), IHH Healthcare Bhd (IHH Healthcare), Maxis Bhd (Maxis), Axiata Group Bhd (Axiata), Sime Darby Plantation Bhd (Sime Darby Plantation), Hong Leong Bank Bhd (Hong Leong Bank) Source: Bloomberg, MCMC Figure 2.4 Top 10 Market Capitalisation 2018 – 2019 32 INDUSTRY PERFORMANCE REPORT 2019 C&M INDUSTRY FINANCIAL PERFORMANCE The domestic C&M industry aggregate revenue was RM C&M Industry Revenue at RM43.37 billion in 2019. This is a decline of 3.7% RM43.37 from RM45.02 billion in 2018. billion 3.7% (2018: RM45.02 billion) DOMESTIC C&M INDUSTRY REVENUE 2017 – 2019 Note: Revenue from major public listed companies only Source: Industry, MCMC Figure 2.5 Domestic C&M Industry Revenue 2017 – 2019 By sector, telecommunications sector recorded contribution from advertising revenue and Pay TV RM34.8 billion revenue in 2019. This is a decline subscription revenue, mainly caused by consumers of 2.8% (2018: RM35.8 billion), due to intense shifting to digital media and OTT services. competition coupled with OTT services eroding traditional revenues. Meanwhile, postal and courier sector revenue was at RM2.69 billion in 2019, declined by 3.6% compared On the broadcasting front, the sector revenue with RM2.79 billion in 2018. The sector revenue was decreased by 8.6% to RM5.88 billion in 2019 (2018: lower as mail business continues to decline and RM6.43 billion). The decline was due to lower intense competition in the courier segment. 33 TELECOMMUNICATIONS SECTOR In 2019, telecommunications sector revenue recorded RM34.8 billion, with mobile service providers contributed a huge chunk equivalent to 64% of the total telecommunications revenue. The remaining 36% was generated by fixed service providers. Mobile service providers (Celcom, Maxis and Digi) collectively recorded a decline of 3.2% in revenue to RM22.26 billion in 2019 (2018: RM23 billion). This is due to the decrease in legacy voice and SMS revenue. Traditional services revenue (voice and SMS) declined more than 60% for the past 10 years from RM16 billion in 2008 to RM5 billion in 20191. As for fixed service providers (TM and TIME), their revenue declined 2% to RM12.54 billion in 2019 (2018: RM12.8 billion). This was due to lower revenue contribution from TM, on the back of declining voice services revenue and subscriber base. TELECOMMUNICATIONS SECTOR REVENUE 2017 – 2019 Source: Industry, MCMC Figure 2.6 Telecommunications Sector Revenue 2017 – 2019 1 Data extracted from Analysys Mason DataHub on 30 June 2020. 34 INDUSTRY PERFORMANCE REPORT 2019 AVERAGE REVENUE PER USER (ARPU) Blended ARPU for three mobile service providers averaged RM50 per month in 2019, which is a slight increase compared with 2018. ARPU is resilient despite ongoing price competition between service providers. Service providers strive to grow ARPU and service revenue through price innovation that stimulates data usage and monetises data demand, pushing prepaid-to-postpaid migration or upgrading to premium plan and adding innovative services on top of connectivity (such as OTT, games, e-wallet etc). AVERAGE BLENDED MOBILE ARPU 2015 – 2019 Source: Industry, MCMC Figure 2.7 Average Blended Mobile ARPU 2015 – 2019 35 Looking specifically at the ARPU for the three main service providers for 2019, Maxis continue to lead with blended monthly ARPU of RM58, followed by Celcom at RM51. Higher ARPU for Maxis and Celcom was contributed by their focus on premium subscribers.
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